Asian Fall
A large economic downturn in East Asia threatens to end its nearly30-year run of high growth rates. The crisis has caused Asian currencies to fall 50-60%, stock markets to decline 40%, banks to close, and property values to drop. The crisis was brought on by currency devaluations, bad banking practices high foreign debt, loose government regulation, and corruption. Due to East Asia's large impact on the world economy, the panic in Thailand, Indonesia, Korea, and other Asian countries has prompted other Countries to worry about the affect on their own economies and offer aid to the financially troubled nations (The Great Wave).The East Asian crisis has affected almost all of the Asian Nations, but the three hardest hit countries are Thailand, Indonesia, and South Korea. The panic began in Thailand in May of 1997 when speculators, worried about Thailand's slowing economy, excessive debt, and political instability devalued the Baht (Thailand currency) as they fled for market-driven currencies like the American dollar. Indonesia's economy soon fell soon after when the rupiah hit a record low against the
Hopefully these market reforms will allow East Asia to improve itsEconomic outlook. An article in the Economist reported that the Asian economic turmoil and the layoffs that may result, could instigate increased discontent and possibly give rise to violent strikes, riots, and greater political instability (Economist). Economist, articles 5,6 and statistics on Japan, Indonesia, China and Thailand. If the Asian economies fall further, in a desire to raise cash, they might sell the hundreds of billion dollars of U. Chinese banks may carry bad bank loans of up to $1 trillion. Thailand and Indonesia also suffer from being overbuilt during real estate booms that they were the result of huge influxes of cash by optimistic foreign investors. Malaysia and the Philippines are both faced with devalued currencies and lowered stock markets (Asian Fall). David Johnson, 'Asian Fall', pages. The financial crisis, instead of destroying the Asian tigers, will merely serve as a much-needed lesson in debt management, orderly growth, competent accounting practices, and efficient government. Indonesia is plagued by more than $70 billion worth of bad debts and a corrupt and inefficient government.
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